Logistics Center Transactions in the Seoul Metropolitan Area Reach 3.1 Trillion KRW in H1... "Consider Regional Suitability When Investing"

26% Increase Year-on-Year... Strong Performance of Complex Logistics Centers
Concerns Over Construction Delays and New Supply Disruptions Due to Inflation

View of Incheon Customs Express Logistics Center, Jung-gu, Incheon / Photo by Gonghang Photojournalists Group

[Asia Economy Reporter Noh Kyung-jo] As the transaction volume of logistics centers in the Seoul metropolitan area exceeded 3 trillion won in the first half of this year, concerns are rising over delays in new supply schedules due to construction cost increases. Accordingly, when considering future investments in logistics centers, it is advised to take into account not only accessibility to residential areas but also regional suitability.

According to the '2022 First Half Logistics Market Report' recently published by global real estate consulting firm Cushman & Wakefield Korea on the 25th, the transaction volume of logistics centers in the metropolitan area in the first half of the year recorded 3.1 trillion won, a 26% increase compared to the same period last year.

The total number of transactions in the first half was 23 (including 4 pre-purchases), of which 10 were complex logistics centers combining both ambient and cold storage facilities. This was largely due to the strong demand for ambient temperature facilities and the high profitability of cold storage facilities simultaneously.

By transaction amount, the Namsa Complex Logistics Center in Yongin-si, Gyeonggi-do, pre-purchased by CJ Logistics from Hangang Logistics, was the most expensive at 356 billion won. Ewha Asset Management completed the ownership transfer of Yangji Complex Logistics Center, pre-purchased from Yangji Logistics for 262.4 billion won.

The total gross floor area of newly supplied logistics centers in the first half was 1.56 million square meters, centered in the eastern region (747,000㎡) and western region (513,000㎡). Fifteen and six new centers were supplied in each region, respectively.

Currently, there are 26 logistics centers under construction, with a relatively high proportion of cold storage facilities. Cushman forecasts that with the recent growth of the online food market and the rapid supply of cold storage facilities, it will become increasingly important to attract tenants with cold storage demand in the future.

As of June this year, the total gross floor area of logistics centers in the metropolitan area that have completed permits and approvals is approximately 19 million square meters, of which about 10 million square meters (53%) have already begun construction. Supply is scheduled in the order of southern region (6.24 million㎡), eastern region (6.08 million㎡), and western region (5.55 million㎡).

A Cushman representative stated, "There are recent issues such as construction cost increases due to inflation, strengthened safety regulations, and the administrative cancellation of logistics center construction adjacent to housing development districts," adding, "As delays in logistics center construction are caused, regional suitability should also be considered when investing in the future."